Credit Card Advice 8/14/11

As you pull them out of your mailbox, credit-card offers can seem so enticing - zero percent introductory interest rates … attractive cash-back options … and no annual fees. It may seem like the ideal time to get a new credit card. But Consumer Reports' Chris Fichera says be aware that your credit score can be hurt temporarily when you apply for new cards.

"Each time you apply for a card your credit score can take a hit, and you might not want to risk that if you're applying for a mortgage or other significant loan in the near future," says Fichera.

But if you already have a lot of cards, don't worry. Contrary to popular belief, having several cards may actually help your credit score … if you use them wisely.

"The more credit you have available, the better it is for your credit score. But you still have to keep your spending well under your card limits and keep making your payments on time," says Fichera.

Another common misconception - that you should hold on to your oldest credit card no matter what.

"How long you've had credit does count for 15 percent of your credit score. But even after you ditch a card, it can still count toward your score for as long as ten years."

So if your overall credit history is healthy, it may be a good time to get rid of your old cards if you don't like their terms. But do check carefully for any fees, like on balance transfers, and make sure you know what the annual percentage rate will be once the introductory rate expires.

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